20% of Workers Laid Off in the Past 5 Years Are Still Unemployed Today

By Unemployment-Extension.org | October 23, 2014 at 0:19 AM |

Unemployment has been garnering a significant amount of media attention recently, with debates raging about the true value of unemployment metrics. A new study seeks to shed some new light on the subject.

One out of every five workers laid off in the past five years are still unemployed today, according to the provocative results of a study by The John J. Heldrich Center for Workforce Development at Rutgers University. The study, entitled "Left Behind: The Long-term Unemployed Struggle in an Improving Economy,” examines the impact of the Great Recession on those who have experienced long-term unemployment.

“The levels of unemployment for workers who remain jobless for more than six months is among the most persistent, negative effects of the Great Recession,” the study contends. “As of August 2014, three million Americans, nearly one in three un-employed workers, had been unemployed for more than six months. Over two million Americans have been unemployed for more than a year.

While the percentage of unemployed workers who have been unemployed for more than six months declined from 46 percent in 2010, it is still above the 26 percent level experienced in the worst previous recession in 1983 and more than double the pre-recession era. Unemployment rates in 29 states are at post-recession lows, but long-term unemployment remains above pre-recession levels in 41 states.”

It is true that unemployment numbers have declined, down to 3.3 million from an all-time high of 6.6 million in 2010. But it is worth noting that many of the unemployed who were able to successfully find jobs were forced to take a significant cut in pay or prestige in order to do so.

Among laid-off Americans who say they've found a new job, 46% said that that new job came with a pay cut and 44% reported a drop in status, the study also found. This is in part because while a great number of middle-wage jobs were lost during the Great Recession, the majority of jobs that were regained were in low-wage sectors, such as retail and fast food, for example.

The study also revealed that only a slim majority of participants, 54%, received any kind of unemployment benefits while they were out of work. Furthermore, the vast majority of those who did receive benefits, 84%, reported that those benefits ran out before they found another job. This is a crucial detail, as in many cases unemployment can do long-term damage to a family’s financial situation, forcing the depletion of savings and retirement funds, and incurred credit card debt, for example. In cases where unemployment benefits are received or insufficient, the damage is even more severe.

All in all, the study reveals a bleak reality: in spite of economic growth and decreases in unemployment, the Great Recession has left a dramatic and deleterious mark on many American workers. In many cases those remaining one-fifth of workers who remain unemployment might not have a chance of recovering a job comparable to the one they lost anytime soon.

A new bill was later introduced that would extend benefits for another five months and contained a retroactive element. The House also introduced a bipartisan unemployment extension bill. Yet, no action has been taken on either of those bills. Due to lengthy Congressional recesses, combined with urgent foreign policy issues and the upcoming midterm elections, it now seems as though there will be no forthcoming action in the immediate future.